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bitcoinsWhat is Bitcoin?
Bitcoin is a type of digital or virtual money that can be transferred from person to person or person to business via software of the same name ‘Bitcoin’. It can be held in an online wallet via various devices such as tablets and mobiles. Bitcoin is its own unit of measurement and therefor has no connections with any other currencies making it a currency of its own; sometimes the cryptocurrency is referred to as a decentralized currency.
How does Bitcoin work?
The first thing anyone wishing to use bitcoin should do is download a bitcoin wallet, this will generate you an address and will generate a new address every time you need to use your bitcoin. When you wish to pay or receive monies you will give the address of something like giving your email to somebody, however bitcoin addresses should only be used once.
Advantages of Bitcoin
It’s fast – in comparison to cheques or bank transfers, as depending on the banks, you will have to wait in most case’s at least a day or two. Whereas with Bitcoin it can be done instantly if there is ‘zero-confirmation’, meaning the merchants will take the risk of the transactions that have not been confirmed by the block ledger, however even if the merchant requires conformation from the block ledger it normally takes no longer than 10 minutes.
It’s cheap – yes debit or credit cards are also fast but you and the merchant will have to pay in some cases a fairly hefty charge for using the service whereas Bitcoin’s charges are very minimal and in some cases free, for the merchants the charges are typically 2 to 3 % cheaper than standard fees.
It’s secure – at least the information is secure unlike when you purchase something online with a credit card, think about it, you type into a computer all the information somebody needs to clean out your entire life saving, your name, account numbers, expiry date, and CSV. With credit cards there is always the chance you could be victim to hacker’s fake pages, key loggers and even somebody watching over your shoulder; now if you look at how bitcoin does it, you will use two keys, a public key, and a private one. The public one is your address and when you combine it with your privet one you are for all intense and purpose signing the transaction off.
No governmental control – as with what happened in Cyprus back in 2013 the central bank helped itself to uninsured deposits of over €100,000 to help recapitalise, now with bitcoin that simple can’t happen as the government do not own it, you do. Therefor they have no control.
Licensing for bitcoin
Governments around the world have many concerns regarding the regulation of bitcoin, but as yet most have been unable to come up with ways to regulate it, as it falls outside the normal standards and the usual regulations cannot be applied.
Regulation advice
If you are planning to move into any financial sector and would like some free advice on which jurisdiction may best suit your needs, or/and you require licensing please feel free to visit Eltoma Corporate Services web page, alternatively give one of our specialists a call, you can find contact numbers on our contact page.